Reference no: EM133144428

Question - Prepare journal entry using U.S. GAAP for the following transactions:

1. Soroka invested $200,000 in shares of a closely held firm, Leah Enterprises, which it hopes to sell for a profit in the next few years. Leah is not traded on an exchange, Sokora asked its valuation firm to determine Leah's year-end value. The valuation firm determined the investment is worth $198,000 on December 31, 20x1.

2. On December 31, 20X1, Soroka issued $1,000,000 worth of 10 year 6% convertible bonds at par.  On the date of sale, the market rate of interest was 8%.  Each $1,000 bond is convertible into 20 shares of common stock.

3. Soroka issued $25,000 worth of redeemable preferred shares. The shares are redeemable if Soroka's 20X2 first-quarter sales reach $2,500,000.